We call upon nationwide managers from minister to governor general
and ambassador to support the private sector.

First Vice President Eshaq Jahangiri says Iran’s nonoil exports have reached
$47 billion, adding: “We hope that this figure will reach $50 billion, so
that we could move towards nonoil exports of $100 billion.”

Jahangiri, speaking on the 21st anniversary of National Export Day, said:
“We talked about nonoil exports of $1.5 billion to $2 billion last year, and
today we should appreciate those who have brought the country to this point,
and keep their respect.”

“We have twice as much non-oil revenue as oil,” he said. “It’s a great job.”

Noting that about 23.8 million people were employed in the country, he said
about 4 million of these workers are in the public sector and the rest, that
is some 20 million, are working in the private sector.

He added that three million unemployed people could be attracted to the
private sector upon a boost in business.
Noting that Iran’s economy has ranked 18th or 19th in the world, he said the
private sector should be protected and appreciated.

“The private sector looks at our behavior in the government; if we treat
them well, they would do greater jobs, so we have to be careful about our
behavior with the private sector,” he stated.

“Foreigners also watch our behavior with the private sector; if our behavior
is appropriate they will be encouraged to make investment in our country,”
Jahangiri said.

Government Sticks to Economic Diplomacy:
The first vice president said that economic diplomacy is one of the most
important policies of the government. Jahangiri added: “The Ministry of
Foreign Affairs is seeking to change its structure and organization in order
to place economic diplomacy at the center of these policies, and to assign
deputyships in a way that economic deputyship would be the center of
attention at the ministry.”

Emphasizing that the Iranian embassies in other countries should support
exporters, he added: “An ambassador who better serves the Iranian exporter
will be more successful.”

Jahangiri said: “We call upon nationwide managers from minister to governor
general and ambassador to support the private sector.

He said that economic stability is the most important prerequisite for
economic activity, and noted: “We insist that the key economic indicators
are clearly explained to economic activists.”

Noting that the average annual foreign exchange revenue from oil exports
stand at $45-50 billion, he reiterated that the same amount of revenues
comes from nonoil exports. “We have $100 billion in foreign exchange revenue
annually and if we estimate our import of goods at $50 billion, our trade
balance would be positive.”

He said: “We have about $20-30 billion in trade-offs. Therefore, we have no
reason to let turbulence in the exchange rate and cause exporters tow
worry.”

The VP said there is no turmoil in exchange market and the current rates are
acceptable and would not face exporters with economic shock.

Elsewhere in his remarks, Jahangiri said: “At the current stage, we insist
on using official currencies other than US dollar, like euro, in
international transactions.”

Accordingly, he added, the Islamic Republic is seeking to reach agreements
with foreign countries to use national currencies.

He went on to say that in his recent trip to Turkey, Tehran and Ankara
agreed to use their national currencies in bilateral trade.

Trade Deficits Scrutinized:
Also present at the Export Day ceremony were Minister of Industry, Mine and
trade Mohammad Shariatmadari, Chairman of Iran Chamber of Commerce,
Industry, Mines and Agriculture, Gholamhossein Shafei, Head of Trade
Promotion Organization of Iran Mojtaba Khosrotaj as well as other
governmental officials and representatives from Iran’s private sector.

“Given the country’s capacities and capabilities, including educated young
people, engineers, technicians, skilled labor force, abundant mineral
reserves, unique geopolitical situation, vast sea borders and access to free
waters, it is not far off the mark to say Iran’s share of world trade should
stand at 1% per year at least. As such, the government plans to increase
exports to reach $180 billion by 2025,” Shariatmadari was quoted as saying.

At present, Iran accounts for 0.34% (oil included) and 0.24% (exclusive of
oil) of the world annual trade.

According to Shariatmadari, the value of 10 goods topping the list of Iran’s
exports last year amounted to $23.8 billion and exports to our top 10
customers stood at $35.8 billion.

Over the last three decades, he said, there have been no significant change
in the variety of Iran’s exported products, nor in the number of export
destinations.

“Despite everything that has been done, our foreign trade amounted to around
$45 billion in the first six months of the current Iranian year (March
21-Sept. 22). This shows that our economic share is still small. This
renders us incapable of expanding the size of our market or increasing our
production,” he said.

“The problem with our trade today is the lack of a belief and a national
determination in both business owners and laymen for embarking on exports as
a solution to our economic problems. Then comes the fact that 95% of our
production units are not export-oriented. Finally, there’s the problem of
the National Development Fund whose board members do not prioritize
expansion of businesses’ working capitals or new investments in
export-oriented production.”

Shariatmadari said granting export incentives, improving the business
environment, doing away with obstructive and contradictory regulations and
expanding the related infrastructure are among measures that need to be
taken.

Need to Add Value to Exports:
Shafei, the ICCIMA chief, also said the lion’s share of Iran’s exports
consists of agricultural products and raw material.

“We should know that in the years ahead, we might not have much success in
the global market of these products due to the water crisis in our country
and the high competitiveness in the raw material market. Therefore, we must
change our outlook toward the production sector and opt for exports of
industrial products,” he said.

Shafei noted that according to figures released by the Central Bank of Iran,
the average value of goods exported from and imported to Iran stands at $341
and $1,308 per ton respectively, which show the low value-added of Iranian
products in comparison.

The seasoned businessman spoke of high final prices of products, dilapidated
machinery, high energy consumption and the fact that Iranian products lag
behind in technology compared with foreign ones as the main handicaps facing
exporters.

“There is a need to sign free or preferential trade agreements with other
countries. Since we are not a member of World Trade Organization, we are
made to pay up to 20% tariffs. FTAs and PTAs can help us get past this
barrier,” he said.

Iran became an observer member to the world organization in 2005, but WTO
failed to assign a group chairman to discuss Iran’s foreign trade regime,
due to the opposition of the US that has been hostile toward Iran ever since
the 1979 Islamic Revolution.

Mojtaba Khosrotaj, the Head of Trade Promotion Organization of Iran, said in
August that joining WTO is no longer a priority for the country amid US
aggressive Iran policy under President Donald Trump.

“Our priority is now to increase cooperation with neighboring countries and
those in the region, which offer the most benefits to us,” he was quoted as
saying.

Not being a WTO member, Iran has been banking on free or preferential trade
agreements with the countries it has strong economic trade ties with. A PTA
with Turkey was implemented early 2015 and similar deals are expected to be
signed with Eurasian Economic Union states, among others.

Shafei added that trade is a two-way street and products cannot be exported
without importing anything in return.

“All countries are after their own benefits and we have no other choice but
to accept this principle of trade,” he said.

Numbers Speak for Themselves:
According to the Islamic Republic of Iran Customs Administration, Iran’s
non-oil foreign trade during the first half of the current Iranian year
(started March 21) stood at $44.13 billion, indicating a 6% rise compared
with the last year’s corresponding period.

China was the main customer of Iranian products during the six-month period,
as Iran exported $4.31 billion worth of goods to the Asian country, 7% more
than the corresponding period of last year.

Other major export destinations included Iraq with $3.18 billion, the UAE
($2.95 billion), South Korea ($2.06 billion) and India ($1.33 billion).
Exports to Iraq and South Korea rose by 5.47% and 12.86% respectively
compared to last year, but the UAE and India imported 17.1% and 6.52% less
goods from Iran in H1 over the last year’s same period.

Iraq topped the list of neighboring countries’ imports from Iran during the
period, with $3.2 billion. The UAE and Afghanistan followed with $3 billion
and $1.26 billion worth of imports from Iran respectively.

Among the neighbors, Qatar and Russia saw the highest growth in imports from
Iran (71% and 70%, respectively).

The growth in exports to Qatar comes as Saudi Arabia, the UAE, Bahrain and
Egypt have severed diplomatic ties and cut land, sea and air links with Doha
since June. Iran and Turkey have stepped in to supply the Qatari market.

Qatar’s imports from Iran stood at $91 million during the period under
review. Iran’s exports to Russia amounted to $123.6 million in the same
period.

Notably, Iran’s exports to EU’s 28 nations during the first half of 2017
exceeded $5 billion, indicating a 227% rise year-on-year, according to
Eurostat.

Petroleum, petroleum products and related materials accounted for a majority
of Iran’s exports to the EU during the period, with a total value of €4.4
billion.

Italy was the biggest importer from Iran in H1 among all the European
states, as it bought €1.54 billion worth of Iranian goods during the period.
France, Greece and Spain followed with €1.26 billion, €638.5 million and
€609.4 million worth of imports respectively.

Iran imported €4.94 billion worth of commodities from the European Union
during the same period, recording a %38.5 YOY rise. The imports mainly
included manufactured goods and chemicals. Germany topped the list of
exporters to Iran, shipping €1.39 billion worth of goods to the Islamic
Republic. Italy came second with €849.6 million and France followed with
€763.7 million.

According to the European Commission, the European bloc imported €5.5
billion worth of goods from Iran in 2016, up 344.8% YOY. The imports were
mainly energy-related, including mineral fuels (€4.2 billion), manufactured
goods (€0.4 billion) and food (€0.3 billion).

Iran’s export of non-oil goods in the last Iranian year (March 2016-17)
stood at 129.64 million tons with a total value of $43.93 billion.
Petrochemical exports amounted to $9.55 billion for the year.

As for oil exports, Iran earned over $23 billion from crude oil sales during
the six months, the CBI reported, as the country shipped over 2.6 million
barrels per day of crude oil and condensates on average.